China's Quest for Asia

About the Authors

December 30, 2004,was hardly a proud moment for China, Asia's
rising superpower. On that day, China's Foreign Ministry spokesman,
Liu Jianchao, announced $2.7million in disaster relief to victims of the
great Sumatran tsunami that killed hundreds of thousands of people
and wiped out hundreds of towns along the western coast of the
Indonesian island. Liu was understandably a bit defensive as
foreign reporters peppered him with questions about the minimal aid
amount. "China is a developing country," he offered. "We have a
population of1.3billion. China's per capitagdpis still very low."
The $2.7million was, he explained, "equivalent to the annual
income of20,000 farmers."

While for the next several days the United
States, Japan, Europe, Australia, and Canada continued to escalate
their tsunami aid packages to an eventual total of over
$4billion,
China was playing aid catch-up ball with rival Taiwan, which had
started off the week with a generous pledge of $50million. By
mid-January China had pledged about $63 million, though
Taiwan's relief teams were far more visible in the stricken areas
than China's. Chinese aid efforts were dwarfed by the fleets of
U.S. helicopters ferrying vast cargoes of medical, food, and
construction supplies from American aircraft carriers and support
ships anchored in the hazy distance directly to needy masses of
refugees ashore.

Unsurprisingly, this was not an image that
was seen in China. China's official Xinhua news agency breathlessly
reported that Indonesians were emotionally overwhelmed by China's
aid. On January2, a week after the tidal wave, a Sumatran refugee
named "Awada," who drove an ambulance for a team of Chinese medics,
was moved to proclaim, "China, in my heart, is a great nation!"
These words (complete with exclamation point) comprised the
headline at the top of the international news page on the
January3, 2005People's Daily.
Despite the fact that China's meager contributions excluded them
from the international "core group" of tsunami aid donors, Chinese
readers were left with the rosy impression that their country was
"a major humanitarian aid power."

To the rest of Southeast Asia, reported
theNew York Times(January4,
2005), the huge American, Japanese, and
European aid campaigns were "a reminder that the world's most
populous country is still far from being the dominant power in
Asia." Added theWashington
Post(January5, 2005), "the response
has also underscored the limitations of China - a fast-growing
economic powerhouse that nevertheless has not been able to offer
anywhere near the amount of aid provided by Japan, the United
States or Britain."

All true. But anyone who concluded from
theTimesandPostaccounts that in2005, China was merely a
bit player in Southeast Asia - or anywhere else in the world -
would be dead wrong. Beijing's political leaders know that
superpowers aren't measured by their foreign aid budgets, or by
their economies. They are measured by their ability to use their
comprehensive national power - economic, political, and above all
military - to gain the obeisance of their neighbors and their
regional and global rivals.

Asian
superpower

It seems thatthe United States may already have resigned itself
to China's imminent emergence as a "military superpower" - the term
Secretary of State Condoleezza Rice used to describe it in a
June29, 2005interview with theWall Street Journal. For regardless of the niggardliness of its Tsunami
aid effort, China is now the dominant power in Southeast Asia. How
it became so should yield insights into its strategies for the rest
of the globe.

In his National Security Strategy paper of
September2002, President Bush announced, "We must build and
maintain our defenses beyond challenge," an unmistakable
declaration that U.S. defenses must be so awesome that no other
country would even "challenge" them. At the same time, he pledged
that he would be "attentive to the possible renewal of old patterns
of great power competition. Several potential great powers are now
in the midst of internal transition - most importantly Russia,
India, and China." And while he was hopeful about Russia and India,
he could only admit that "China's leaders have not yet made the
next series of fundamental choices about the character of their
state."

In the latter months of2005, the Bush
administration remains agnostic on China's direction. It is clear
that China has no intention of competing with the United States in
the global humanitarian aid sector, which in itself says volumes
about the "character of their state." Benevolence is not a quality
that comes to mind as one ponders Beijing's support for some of the
world's most despicable tyrants - from North Korea's Kim Jong-il to
Zimbabwe's Mugabe, from Uzbekistan's Karimov to the mullahs of
Teheran and the genocidal regime in Khartoum - or notes that
China's closest ally in Southeast Asia has been the Burmese junta
in Rangoon.

No doubt Chinese strategists believe
countries like Sweden, Canada, and Denmark are more suited to
compassionate policies. For a rising superpower in Asia, as
Machiavelli noted in a different context inThe Prince, "it
is much safer to be feared than loved" because "men have less
scruple in offending one who is beloved than one who is feared, for
love is preserved by the link of obligation which, owing to the
baseness of men, is broken at every opportunity for their
advantage; but fear preserves you by a dread of punishment which
never fails."

One reason the United States is losing
influence in Southeast Asia is because it is no longer feared. Of
course, it isn't much loved, either. Though its humanitarian
compassion seems to be taken for granted - Americans can always be
counted on to help in a disaster or crisis - its attention has been
distracted from the region by military and terrorist challenges in
the Middle East and nuclear blackmail from North Korea.

From a geostrategic standpoint, strong
countries surround China. Japan and Korea lie to the east, Russia
to the north, India to the west. The only outlet for Chinese
imperial ambitions is Southeast Asia. Most Southeast Asians
understand that China is rapidly becoming the predominant power in
the region and already behave accordingly. Beijing's diplomats have
effectively translated China's burgeoning economic clout into
political influence, leaving in question the U.S. role in and
commitment to the region, even with its traditional allies and
friends.

If the United States hopes to avoid the
emergence of a Beijing-dominated Southeast Asia and to shore up its
eroding influence, Washington must quickly and firmly reengage the
region on the diplomatic, economic, and defense fronts.
Specifically, Washington must give priority to new free trade
agreements (ftas) in the region, to fuller participation and
leadership in other pacts such as the Asia Pacific Economic
Cooperation (apec) forum and theaseanRegional Forum
(arf), and
to stronger bilateral anti-terrorism and disaster relief
cooperation.

Singapore's Senior Minister Goh Chok-Tong
has publicly chided the U.S. for its disengagement from Southeast
Asia. He noted in a June9speech that in the past decade China has
successfully launched27separateasean-China mechanisms
at different levels, while28years after the U.S.-aseandialogue was
formalized in1977, "there are currently only seven U.S.-asean bodies and
they meet only infrequently."

The Pentagon and State Department must
develop a toolbox of carrots and sticks to convince Southeast Asia
that America is committed to President Bush's goal of the "global
expansion of democracy" and intends to defend its interests and
those of its allies and friends in the region. The U.S. still
maintains considerable influence in international development aid
but, unlike China, has been reluctant to mix politics and
economics. This reluctance should be reexamined. Judicious
placement of U.S. military and naval assets, in consultation with
allies, during times of predictable crisis - such as the East Timor
violence in1999, tensions in the Taiwan Strait, piracy in the
Straits of Malacca, and political demonstrations in Burma - would
reassure the region of America's continued importance to its
stability.

On the diplomatic front, the United States
must reestablish cabinet-level strategic dialogues with America's
two senior allies in Asia, Japan and Australia, both essential to
Southeast Asia's security and prosperity. Also, the high-level
"global dialogue" that Deputy Secretary of State Robert Zoellick
opened with China in August2005 should be
managed at a lower level.

What Beijing
wants

In early 2000,
Condoleezza Rice wrote, "China resents the role of the United
States in the Asia-Pacific Region. This means that China is not a
'status quo' power but one that would like to alter Asia's balance
of power in its own favor. That alone makes it a strategic
competitor, not the 'strategic partner' the Clinton administration
once called it."1

While Dr. Rice has become a bit less direct
in her locution during her tenure as secretary of state, her
observation remains valid. Johns Hopkins professor Francis
Fukuyama, writing in theWall
Street Journal(March1, 2005), sees a similar
trend in China's ambitions: "The Chinese know what they are doing:
Over the long run, they want to organize East Asia in a way that
puts them in the center of regional politics. They can succeed
where [then-Malaysian Prime Minister Mohammed] Mahathir failed
because they are an economic powerhouse capable of doling out
favors." Of course, they can also mete out sanctions.

In the view of numerous analysts, a desire
to demonstrate to Asia that China, not Japan, is the dominant
regional power was the animating force behind the
government-organized anti-Japanese riots and boycotts of Japanese
goods in the spring of2005. It is clear that Beijing intends to become the
predominant force in Southeast Asia by constructing a framework of
relationships that place Beijing in positions of leadership and
influence while isolating the United States from its traditional
role and its allies in the region.

The Sino-Southeast Asia trade
bloc

At a beijing-inspiredsummit meeting in Vientiane, Laos, in
November2004, China, Japan, South Korea and the ten member
states of the Association of Southeast Asian Nations reached a
consensus on an "asean+3" trade framework in Asia. Although Tokyo initially
resisted Beijing's moves, there was a lack of interest at the State
Department, Japanese diplomats have told us. Secretary Powell and
his top Asianist, Deputy Secretary Richard Armitage, had announced
their impending resignations and were busily proclaiming their
successes in relations with China. The inclination at Foggy Bottom
was not to antagonize the Chinese over something as trivial as a
regional trade bloc.

Inattention in Washington impelled the
Japanese diplomats in Vientiane to pin their hopes onasean's largest member,
Indonesia, to stop the Chinese juggernaut. But Indonesian President
Susilo Bambang Yudhoyono, himself a novice on the regional stage,
refused to take the lead, and no otheraseanmember was willing
to challenge Beijing's overtures.

The outcome of the Vientiane summit
startled even the Japanese. China proposed an entirely new "East
Asia Summit" (eas) framework as a forum for regional security issues
that pointedly excluded the United States and Australia. It was as
if China had pulled the wooden stake from the heart of
Mahathir's1990 "East Asian Economic Caucus" proposal - his
notorious "caucus without the Caucasians" - with the resulting
monster even more hostile to U.S. participation in Southeast Asian
affairs than Mahathir's initial vision.

The neweasarchitecture came in
the form of China's proposed Free Trade Area withaseancountries, which
invited eachaseannation to negotiate separately with China rather
than haveaseanas a unit do so. This individual negotiation
structure enabled Beijing to "divide and conquer" theaseanstates, with the
pro-China countries (of which Thailand is the most prominent)
moving ahead with separate deals and others, like Malaysia and
Vietnam, going along because they fear Chinese
retaliation.

In essence, the China-aseanFree Trade Zone
(ftz)
grants a period of duty-free entry for the individualaseancountry's goods
into the Chinese market - generally a three-year period known as
"early harvest" - after which Chinese goods will have reciprocal
free entry. As oneaseandiplomat pointed out in2003, this means that
anasean partner will be granted three years to compete
in China's market in those raw materials, agricultural products,
and minerals which China does not produce, but will not be able to
compete in manufactured items because Chinese domestic products are
less expensive across the board. After the "early harvest" period,
however, China's manufactured goods will have full tariff-free
access to the markets of its Southeast Asian partner, access which
will result in a predictable demise of the partner's industrial
competitiveness.

While this may make sense in a
strictWealth of
Nationssense, the ultimate effect
will be China's industrial dominance in Southeast Asia, with the
individualaseanpartners reduced to providing China with
non-manufactured goods. Singaporean Prime Minister Goh Chok-Tong,
looking for a silver lining to Chinese economic predominance in the
region, suggested thatasean use the
challenge as a "time for action," adding that this is the moment to
adapt to meet the change and to realize regional economic
integration.

Although Japan agreed to the inauguration
of an East Asia Summit (eas) framework without the United States, Japanese
diplomats say unofficially that Tokyo did warn Washington of the
danger of China's moves to include military and security issues in
the trade structure, to no avail. According to one Japanese
diplomat, Tokyo attempted to keep the draft agenda of the
firsteassession (scheduled for December2005)focused on economics and trade, but the Chinese
state media surprised the Japanese by announcing that "in the near
future, there will also be talks on the development of political
cooperation and also some military cooperation."

Japan is already alarmed by the sudden
shift ineasgoals. To many Japanese observers, theeaswill be a watershed
in Asian geopolitics. How theeasdevelops in the
years beyond2005 will determine whether the East Asian
Community will be a large "C" European Union-style Community or a
small "c" community, which involves dialogue and consultation but
respects the independence of the individual members and encourages
flexible cooperation.

The China-ASEAN security
relationship

Asean countries alreadyhave a number of security forums and alliances, and
the series of initiatives China is proposing appears designed to
increase Beijing's influence over the region's network of security
relationships - and decrease America's.

Current security conferences include
theaseanRegional Forum (arf), a foreign
ministers conference that discusses regional security issues, and
the Shangri-la Dialogue, an annual security forum for defense
ministers organized by the International Institute for Strategic
Studies in London. China is invited to attend both of these
conferences, but it stopped attending the Shangri-La Dialogue
in2004,
apparently because it believed Asian countries, not Western
countries, should lead regional-security mechanisms.

In November2003, China circulated a
concept paper atarfthat proposed anarfSecurity Policy
Conference, which involves the member states' vice minister-level
defense and security officials. The first meeting of the new
conference was held in Beijing in November2004and the second in
Vientiane, Laos in May2005. Although the Conference nominally invites all
current members ofarf, many regional observers interpret the new proposal
as an attempt by Beijing to gain control overarf. Like its proposals
forasean+3, the China-aseanFree Trade Zone, and the Asia Europe Meeting
(asem),
thearfSecurity Policy Conference is another instrument of
Chinese hegemony.

China is also expanding
military-to-military relationships in Southeast Asia. Beijing has
developed a number of military-to-military initiatives, including
joint military and maritime rescue exercises with Australia, the
Philippines, Thailand, India, and Japan; trainingaseanofficers at
China's People's Liberation Army (pla) military courses;
and Chinese-language training for Philippine military officers.
Singapore hosted a14-nation joint sea exercise that included most of
theasean countries and China.

In contrast to China's focused expansion of
diplomatic and security relations with Southeast Asia, the U.S. is
actively downgrading the security relationship withaseancountries. Despite
the fact that no secretary of state had missed anarfmeeting since1982, at her first
opportunity to attend, Secretary Rice skipped the July25-29, 2005meeting in
Laos, sending her deputy in her place.

Delighted, the Chinese took the opportunity
to marginalize the Vientianearfwhen it rolled around at the end of July.
While theaseanforeign ministers made do without the company of
their U.S., Japanese, and Indian counterparts, Chinese Foreign
Minister Li Zhaoxing's presence in Vientiane was conspicuous. He
attended separate one-on-one sessions with each of the tenaseanforeign
ministers and joined theasean+3forum with diplomats from Japan and South
Korea. But he left the Laotian capital at the opening of thearfmeeting, which
included ministers from Australia, Canada, New Zealand, and of
course the U.S. deputy secretary of state. Savvy diplomatic
observers saw Minister Li's snub of thearfas a clear signal of
China's disdain for Asian security meetings that included
"non-Asians."

Rather than grip-and-grin with the
non-Asian diplomats, Foreign Minister Li flew directly to Burma as
soon as thearfbegan. Burma had been pressured to abdicate the
chairmanship ofaseanfor thearfsession in order to appease American sensibilities
over human rights, and China's foreign minister found it more
politic to tend to his Burmese allies than to dignify thearfwith his
presence.

After dealing with the intense "non-Asian"
concerns about Burmese repression and Muslim terror, someaseanleaders -
maybe most - found that their collective blood pressure eased with
China's insouciant attitude. And if they were going to be lectured
to about these matters, theaseans would prefer that
it come from Secretary Rice herself, and not a lesser official.
Confirmingaseansuspicions about America's attitude toward the
region, there was no American representation at theaseanEconomic Ministers
meeting in September. An event normally attended by the United
States Trade Representative, in2005it was not
downgraded but ignored.Theaseans are beginning to think Washington neither values
them nor is angry with them. It seems Washington just places a low
priority on relations with Southeast Asia.

Australia
targeted

Not only doSoutheast Asians feel a bit neglected, but
Australia, a prominent Pacific democracy and America's most
reliable ally in the region, has found its patience strained. In
March, one independent Sydney pollster detected slippage in
Australians' traditional fondness for the United States while
esteem for China seems to be rising. Increasing trade ties with
China have worked to dampen the enthusiasm of Australia's business
sector for the Australia-New Zealand-U.S. Security (anzus) Treaty. Despite
the conclusion of a U.S.-Australia Free Trade Agreement in2004,2the sudden
ballooning of Australia's trade with China - which made China
Australia's fourth largest export market in2004- has given Beijing
diplomatic leverage.

In October2003, just a day after
unhappy oppositionmembers hooted
President George W. Bushwhile he was
addressing Australia's Parliament, Chinese President Hu Jintao
addressed the Australian Senate with assurances that China "wants
to become Australia's long-term economic partner as trade ties
enter a new era." He then followed up by signing the biggest single
trade deal in Australian history, a25-year natural gas
supply contract worth U.S. $21.7billion. In2004, Chinese steel
mills were dangling the prospect of a U.S. $9billion,25-year iron ore supply
contract in front of Australia's top mining concern,bhpBilliton.
Throughout2004and2005, China pursued additional trade contracts for - of
all things - uranium. Australia does not sell fissionable materials
to China because of Beijing's marked disregard for international
nonproliferation restrictions. Yet, when Chinese officials
approached Canberra about purchasing refined uranium for power
purposes, the Australians showed considerable interest. As
negotiations continue, it is clear that Australia is less concerned
about proliferation than it is desirous of good trade relations
with China.

And no wonder. By July2005, China had
overtaken Japan as Australia's largest source of imports in East
Asia, with Australia importing U.S. $14.3billion in Chinese
goods in2004. And while Japan remained Australia's biggest
export market, Australia increased its exports to China by21 percent,
mostly due to increased Chinese demand for iron ore, coal, and
wool.

It was understandable, then, that
Australian politicians began to be somewhat vague on the nature of
their alliance relationship with the United States when talk turned
to China, Taiwan and the like. In May2004, one former Labor
minister, John Kerin, spelled out the dilemma. If China responded
to "Taiwan's latest push for independence with an invasion and the
US retaliated, this would be a 'disaster' for Australia," he wrote
in theWeekend
Australian(May8-9, 2004). "Australia
faced an unpalatable choice: say no to the US and 'irreparably'
damage the alliance, or say yes and have billions of dollars in
investment in natural gas and resources wiped by China in a
post-conflict phase."

Indeed, Australia was sending mixed signals
to both Beijing and Washington about its commitment to theanzusalliance in
a Taiwan contingency, and the Australian press commented
extensively on the issue throughout the summer of2004. Finally, Prime
Minister John Howard felt obliged to clear the air in August,
saying, "America has no more reliable ally than Australia and I am
not ashamed to say that, but we have interests in Asia. We have a
separate strong growing relationship with China, and it is not in
Australia's interests for there to be conflict between America and
China."

China's tactics were finally bearing fruit.
Trade had become a wedge issue between Australia and the United
States, and by deftly manipulating Australian media perceptions of
China's increasing stake in Australia's economy, Beijing began to
create fissures in theanzus treaty.

Beijing recognizes the importance of
Australia to the Trans-Pacific alignment of Asian democracies and
has tried its wedge strategy on Canberra with some success. On the
heels of China's announcement on March8, 2005of an
"Anti-Secession" law, whereby Beijing notified the international
community that it has the right to attack democratic Taiwan, a top
Chinese official visited Australia and demanded that Australia
amend its50-year-old alliance with the United States,
specifically to recognize China's territorial claims to democratic
Taiwan.3

The Chinese Foreign Ministry's top Pacific
policy official, He Yafei, told theAustralian(March8,
2005), "If there were any move by
Australia and the United States in terms of that alliance
[anzus Treaty] that is detrimental to peace and
stability in Asia, then it [Australia] has to be very careful," and
added that this was "especially so" in the case of
Taiwan.

Immediately following He's remarks,
Australia's Foreign Ministry released a statement asserting that
Australia had no intention of amending any facet of the treaty with
America and that the alliance remains strong. In general, Beijing
is careful to keep its negative messages to Canberra at a minimum,
as it finds that offering attractive trade inducements is a more
effective way to gain friends and influence people
there.

Clearly not satisfied with Australian
obeisance, in April2005,Beijing tried carrots and sticks to influence
Canberra's foreign policy. Australian Prime Minister John Howard
traveled to China that month, where Beijing offered a bilateral
free trade agreement, the first ever with a developed country. To
Howard's credit, he made no concession to China on Taiwan policy
during the visit. Furthermore, encouraged by Indonesia and
Malaysia, Howard declared Australia's interest in participating in
the East Asia Summit (eas). China's reaction was negative. Howard told
reporters, "It's fair to say that the Premier expressed stronger
views about Australia's participation than had previously been
expressed by China," but declined to elaborate. Later, according to
a report in theSydney Morning
Herald(April20, 2005), an Australian
official complained, "the Chinese haven't lifted a finger to help
us," and another admitted, "deep down, the Chinese would rather we
weren't there." Australia did eventually gain an invitation to
theeas,
but only because of support from theaseancountries.

Despite the marginal policy successes with
Canberra, the fact that Beijing feels able to challenge Australia's
alliance with the United States, steeped as it is in shared
national experiences, is clear evidence that China is now a
confident regional power and judges that neither America nor
Australia has the resolve to face it down.

Singapore under
pressure

In January 2001, Singapore's Changi Naval Base berthed the aircraft
carrierussKitty Hawk. It
was the first time a U.S. carrier had had access to port facilities
in Southeast Asia since the United States had closed its naval base
at Subic Bay in the Philippines in1992. At the time,
Singapore's move was seen as an effort to align itself with the
United States in the face of a growing Chinese military posture in
the region. By2004, China had begun to pressure Singapore over its
long-standing military cooperation with Taiwan and, indirectly, for
its security relationship with the United States.

In July2004, Singapore's Prime
Minister-designate, Lee Hsien-loong (son of former Prime Minister,
now Senior Minister, Lee Kuan Yew), visited Taiwan as a private
citizen. China, breaking with all earlier practice, formally
protested the visit and threatened massive economic sanctions if
the new prime minister did not immediately apologize for his
transgression and promise not to repeat it. While he initially
resisted, Lee quickly relented when China cancelled a major
Singapore trade show in Shanghai. Within a month, he was forced to
state publicly that "if a war breaks out across the straits, we
will be forced to choose between the two sides. . . . But if the
conflict is provoked by Taiwan, then Singapore cannot support
Taiwan." The following day, quite pleased with Singapore's new
obedience, the Chinese Foreign Ministry spokesman reported with
satisfaction, "we have taken note of the Singaporean leader's
speech, reaffirming support for the 'one-China policy' and
resolutely opposing 'Taiwan independence.'"

Why China chose to complain about Lee's
visit to Taiwan when his father and predecessor, Lee Kuan Yew, had
visited Taiwan several times during his tenure as Singapore's prime
minister is obvious. Times have changed, and China now believes it
no longer needs to put up with actions taken by its Southeast Asian
neighbors that it disapproves of.

For decades, China acquiesced in
Singapore's unique and extensive military-cooperation relationship
with Taiwan. Singaporean military forces, including artillery,
armor and infantry troops, have been training in Taiwan in
"Operation Starlight" since1975. This relationship
has been very public - and Deng Xiaoping is said to have offered
the country military training bases in China's island province of
Hainan if Singapore would give up Taiwan. Singapore refused.
Indeed, the island nation made it a condition of its diplomatic
recognition of China in1992that it would continue its military training
programs in Taiwan.

In October2000, Singaporean Senior
Minister Lee averred - on the record - that "I had instead clearly
told Li [Peng] that Singapore intends to continue sending its
military servicemen to Taiwan for training and military exercises."
Lee wryly added that he had asked Beijing to inform Singapore in
advance of China's plans to take military action against Taiwan so
that Singapore could evacuate its troops from the island in time.
Lee joked that "if anything should happen," it would be a warning
because "we would be getting out in a hurry."

Singapore's strategic relationship with
Taiwan is critical to the readiness of Singapore's defense forces.
As an island city-state, Singapore does not have the physical space
to train a modern military. In recent years, Singapore has extended
its Taiwan training to include air force and naval drills, and
ground force exercisesfocus on heavy
artillery practice. Singapore and Taiwan both purchase weapons from
the United States, and because of this weapon compatibility it is
not unreasonable to speculate that the Singapore-Taiwan defense
relationship may extend to a host of logistical and
weapon-development agreements. Despite the gravity of the
Singapore-Taiwan strategic relationship,in March2005, apparently at
China's insistence, Singapore abruptly cancelled a port call by two
Taiwanese naval vessels. Yet within a month, Singapore was feeling
sufficiently confident in its ability to withstand Chinese pressure
to restart naval visits with Taiwan. There is speculation that
strong private assurances from Washington have rekindled
Singapore's confidence.

Because Singapore's Changi Naval Base is
the only port in Southeast Asia suitable for U.S. nuclear-powered
aircraft carrier support, it is essential that U.S. forces maintain
a strong cooperative relationship with their Singaporean
counterparts. Moreover, it is important that the United States not
tolerate Chinese pressure on Singapore that would jeopardize
American naval operations in the South China Sea or in the region
in general.

Manila succumbs to Chinese
advances

Following the withdrawalof U.S. forces from the Philippines, the
U.S.-Philippine alliance has atrophied. Through the1990s, the Philippines
suffered steady encroachments on its South China Sea exclusive
economic zone (eez) by Chinese fishing fleets and research ships and
by Chinese naval vessels threatening Philippine navy patrol boats
trying to enforce Manila's rights in its maritimeeez. Ultimately, the
encroachments extended to the Chinese occupation of Mischief Reef,
a Philippine atoll off Palawan Island. Whether Washington simply
did not care about China's increasingly assertive maritime claims
in what had theretofore been generally accepted as Philippine
waters or just wanted to punish Manila for closing U.S. bases, the
result was that Manila felt alienated from the U.S. security
shield.

After September11, 2001, however,
festering terrorist cells active in the Philippines' southern
islands received urgent attention from the Pentagon. Revelations
that Al Qaeda operatives in Manila had planned suicide hijackings
and even the assassination of visiting Pope John Pauliiprior to9/11alerted U.S.
policymakers to the necessity for massive counter-terrorism
cooperation with the Philippines and otheraseancountries. Even
so, U.S. support for the Philippines did not extend to its maritime
frictions with the Chinese. When the Philippine Air Force tried to
purchase usedF-5fighter aircraft from Taiwan at bargain-basement
prices in2002, Beijing threatened retaliation and Washington
failed to support the bid. Manila eventually declined to purchase
the aircraft.

Moving away from threats, China began to
provide military assistance. In March2005,for
example, China offered the Philippines U.S. $3million in military
aid to establish a Chinese-language training program for the
Philippine military. At the same time,Beijing donated engineering equipment, invited the
Philippines to participate in naval exercises, and opened five
slots for Filipinos for military training. In exchange, China
thanked the Philippines for supporting its version ofthe one-China issue and agreed to maintain peace in
the South China Sea. The peace issue is notable because China had
already seized Philippine maritime territory, and the status quo
was very much in Beijing's favor.

When Operation Iraqi Freedom was launched
in2003,
the Philippines dispatched a60-man medical unit to
Baghdad. But when a Filipino civilian was kidnapped in2004, President Gloria
Macapagal Arroyo decided to withdraw the contingent. "Within six
weeks of pulling out of the Iraq coalition," one senior U.S.
foreign-policy official lamented, "our Filipino 'allies' sent
President Gloria Arroyo to Beijing, completed reciprocal visits for
their and China's defense ministers, and signed a confidential
protocol with China on exploitation of South China Sea
resources."4

Why would a country that had been subject
to repeated Chinese military insults suddenly swing into the
Chinese camp? A well-placed Philippine government official has said
privately to us that "There is still considerable pro-American
feelings in the region, but they don't have a leg to stand on
because the Americans have ignored us." Since9/11the United States
has provided about $100 million a year in economic and security
assistance, but throwing money at the Philippines does not buy an
ally. Benign neglect in Washington seems to have sent the message
that the United States never took Manila's views of its security
threats seriously.

Who could blame Manila if it determined it
could not rely on U.S. support in defending itself against a rising
China? Well-meaning but misleading pronouncements such as Secretary
of State Powell's assertion, just after President Arroyo's Beijing
visit, that U.S. relations with China are "the best, perhaps, in
decades" conveyed such an impression.5 Since
then, a combination of Chinese military pressure and economic
incentives has begun to cement Beijing's new relationship with
Manila.

China's influence extends to almost every
country in Southeast Asia, including Indonesia, Thailand, and
Burma. Although they have never fought a war, Indonesia and China
have a history of animosity dating back centuries. The most recent
manifestation came in1965-66, when
Indonesia's communist party was savagely liquidated by the
Indonesian armed forces, in part for its alleged connections with
China's communist party. Overcoming latent prejudices in Jakarta,
China's President Hu Jintao visited Indonesia in June2005to attend the
fiftieth anniversary of the Bandung Conference.6 While he
was in Jakarta, Hu and President Yudhoyono signed a strategic
partnership agreement.

Following theasean Regional
Forum at the end of July, President Yudhoyono went to China and
signed several economic and security-related agreements, including
a deal to get Chinese assistance to develop medium range missiles.
Ominously, Indonesia's defense minister said that the missiles were
necessary because Western arms embargoes had grounded Indonesia's
fighter planes. All of these agreements were signed in the context
of "fleshing out" the strategic partnership. The breadth of China's
ability to influence Jakarta's foreign policy is unknown, but
Beijing's charm offensive certainly has had its
successes.

Chinese influence in Thailand is also
evidenced by the growing significance of bilateral trade and
quarter-century-old military relations. In the wake of the
bilateral free trade agreement (fta) of October2003, trade
between China and Thailand rose35.8percent, from
$12billion
in2003to
$17.3billion in2004. China is
Thailand's fourth largest trading partner, and the China-Thailand
bilateral trade volume ranks third in the China-asean circle.

China and Thailand have maintained close
military ties since the early 1980s, conducting extensive military
personnel exchanges and exercises. Thailand has purchased warships
and army equipment from China, much of which has been tantamount to
military gift aid. On July1,
2005, in celebration of the thirtieth
anniversary of the establishment of bilateral diplomatic relations,
Thai Prime Minister Thaksin Shinawatra outlined his anticipation of
further enhancing cooperation for a more dynamic strategic
partnership with China.

The Southeast Asian country most influenced
by China is Burma. Because of its systematic human rights abuses,
gross mismanagement of its economy, and outlandish corruption, the
junta that controls Burma is an international pariah. Beijing is
literally Rangoon's only friend. China supplies the arms and
economic aid the Burmese military needs to stay in power, and, more
important, it provides political acceptance. In return, China gets
unrestricted access to Burma's natural resources and military bases
at key locations in the Indian Ocean.

At the Julyaseanregional forum,
member countries took the unusual move of passing over Burma for
its turn as chairman of the organization. In solidarity with
Rangoon, China's foreign minister left thearf meeting early
and flew to Rangoon to demonstrate Beijing's continued diplomatic
support for the bloodthirsty generals.

Refocusing on Southeast
Asia

The most importantmultilateral organization in Asia is the Association
of Southeast Asian Nations. American foreign policy should focus on
strengthening its engagement withaseancountries so that,
economically strong and sure of American support for their
independence, they can stand up to China and preserve their
economies, security and sovereignty. In order to accomplish this
goal, the President shouldreturn to
deputy secretary-level strategic dialogues with Australia and
Japan. In February2005, Deputy Secretary of State Zoellick downgraded
bilateral strategic dialogues with Australia and Japan to the
undersecretary level while inaugurating a new strategic dialogue
with China at his level. Zoellick's initiative should be reversed,
with the "global dialogue" he opened with China managed at a lower
level. Secretary Rice should attend the nextarf, and, just as
important, the United States should attend all collateralaseanevents as
well, including theaseaneconomic ministers meeting.Downgrading and ignoringtheasean Forum sends the message to Southeast Asia that
we do not care. This is the message that China is giving them,
too.

Opening talks on a U.S.-aseanTrade and
Investment Framework Agreement (tifa) - a consultative
mechanism for the United States to discuss trade issues with other
countries - could be a first step toward a regional free trade
agreement. The United States has already concludedtifas with Thailand,
Brunei, Malaysia, Indonesia, and the Philippines. The advantage of
a regionaltifawith Southeast Asia, in the context of the legal
restrictions on trade with Burma, is that it is just a framework
for discussion, and Burma gets no direct benefit. In the end,
Rangoon is just sitting at the table and is unable to take
advantage of thetifa's trade-harmonizing influences.

The benefit to the U.S. trade agenda is
that atifawould give Washington a forum for discussing group
trade and investment issues that it is already negotiating in
bilateralftas. Thetifawould preempt problematic issues, give otheraseanmembers in
line for anftaan idea of what to expect when it's their turn, and
help, ultimately, with harmonizing all the various trade regimes.
It would also give Washington a venue and substantive reason for
engagingaseanas a whole that it does not have now.

The United States needs to take advantage
of all its available tools, not only to increase trade and wealth,
but also to increase American influence in asean. Another
trade-oriented tool is the open skies agreement (osa). osa creates
free markets for aviation services. Unfortunately, like the tifa,
osas are underutilized in Southeast Asia. There are bilateral osas
with Singapore, Brunei, Malaysia, and Thailand, but the United
States has not attempted to negotiate a regional osa with
asean.

Reviewing options for diplomatic sticks as well as carrots should
be another priority. China's diplomacy in Southeast Asia has been
successful primarily because Beijing is as open about punishing
recalcitrants as it is about rewarding supplicants. American votes
in international organizations and financial institutions are
effective diplomatic tools. For example, a stick approach can be
used on Burma to achieve the often-stated American goal of
restoring democracy to that beleaguered country. Although there are
few divisions in Washington or between Europe and the U.S.
concerning the military junta, so far sanctions against the hateful
regime have been unilateral. The United States has not used its
considerable influence in the international community to bring the
issue before the United Nations Security Council. The lack of
American action is interpreted not as a lack of ability, but as
indifference.
In the range of issues where U.S. and Chinese interests are
opposite, however, China has been very adept at choosing only those
issues where it is confident it can force its Southeast Asian
neighbors to side with China and against the United States. When
there is no downside to choosing Beijing in a given policy area and
potentially severe consequences to choosing Washington, Southeast
Asian countries will understandably go with Beijing. Washington
must consider ways to counter that trend. Otherwise, Southeast Asia
will fall into the habit of siding with China - even when there is
no benefit in doing so.

The U.S. is passively relinquishing its
influence in Southeast Asia to China through its apparent lack of
interest in Asian economic, security, and political issues.
Recovering from wasted years in which we ignored the warning signs
of regional Chinese political clout will require a shift in U.S.
policy toward mending tenuous alliances that have been unattended
or, in some cases, have grown cold. It is not too late to regain
the trust and confidence of Asia and reaffirm our commitment to the
security and economic development of the region. But that trust
must be earned through a thorough, consistent, and determined
foreign policy.Dana
Dillon is a senior policy analyst in the Asian
Studies Center at the Heritage Foundation.John Tkacikis a senior research fellow at
the Heritage Foundation and is a retired officer in the U.S.
foreign service who served in Beijing, Guangzhou, Hong Kong and
Taipei.

First appeared in Policy Review

Notes

1 Condoleezza Rice, "Promoting the National
Interest," Foreign Affairs (January/February 2000).2 The Agreement came into force on January 1,
2005. See Text of the US-Australia Free Trade Agreement on the
Australian Government website at http://www.dfat.gov.au/trade/negotiations/us.html3 Australia shares with the United States a
critical security interest in defending all democracies in Asia. In
August 2001, then-Deputy Secretary of State Richard Armitage
conferred with Australian counterparts in Canberra and later
commented to reporters that he could not imagine Australia not
supporting the U.S. in any major conflict in Asia - even in
Taiwan.4 For a further discussion of this, see John J.
Tkacik Jr,. "A Fresh Start for America's Asian Policy," Asian
Wall Street Journal (December 1, 2004).5 In May 2004, Secretary Powell told
journalists that China and Russia "are two nations with whom we
have super relations, the best in years." See Secretary Colin L.
Powell, "Roundtable with Print Journalists" (May 26, 2004), at
http://www.state.gov/secretary/former/powell/remarks
/32872.htm. In December, Secretary Powell asserted that "right
now, we have the best relationship with China that we've had in the
last 30 years, and I'm very pleased to say that I think I can prove
it." See Secretary Colin L. Powell, Interview at the Christian
Science Monitor's Newsmaker Press Briefing Luncheon (December
21, 2004), at
http://www.state.gov/secretary/former/powell/remarks
/39999.htm. Secretary Powell insisted in his farewell remarks
that his efforts had "put U.S.-Chinese relations on the soundest
footing that they have been in decades." Farewell Remarks,
Secretary Colin L. Powell (January 19, 2005), at
http://www.state.gov/secretary/former/powell/remarks
/2005/41005.htm.6 The 1955 Bandung Conference was the precursor
to the Nonaligned Movement.